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flemingcrag

Listed below are comments made by flemingcrag between Friday, 1st May 2009 and Friday, 23rd October 2009.

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Bank reform: The radical way 9:02pm on 23 Oct 2009 The return of the Glass-Steagall act is the only way to guarantee the safe future of banking and the economies who rely on them. As lord Adair Turner recently said much of the Commercial banking that takes place, gambling with funds raised in the Retail banking arm serves no other purpose than creating unearned bonuses for bankers and illusionary tax takes for Government.

In a surreal world created by Gordon Brown when he deluded he had done away with "boom & bust" and on the suppositon that the stock market would always rise, he did away with the tax credit on pension funds. The carnage this did to the pensions of those who worked in the Private sector was lost on him as he threw money at his favourite Public Sector.

So the lunacy continues, in a week when it is confirmed the Country is still deep in recession the banks, many of them only standing now because of Taxpayers' money, prepare to pay out record Christmas bonuses. Lewis Carroll would be considered a novice in creating fantasy when compared to what Gordon calls PRUDENCE.
Brown and markets 10:07am on 30 Sep 2009 Gordon Brown was seduced by the bankers before he even came into office he was privy to their attempts to have Glass-Steagall repealed (successful in 1999) and how this extra leverage would allow them to create a tsunami of tax revenues that would allow Gordon to deluge his sacred cow Public Sector with undreamt of wealths.

He did what was required of him as soon as he came into office removed the stabilising hand of the BoE from the financial tiller, something Eddie George and Peter Lilley for the Conservatives argued against. Gordon then fulfilled the second part of his faustian pact by changing the method of measuring inflation in the economy by removing that most volatile and accurate indicator of trouble brewing, namely housing costs.

Gordon and Tony then spoke of litle else but light regulation for the City, dinner speech after dinner speech resonated with their thunderous message, the markets know best and all the time the monies rolled in to the tax coffers and the bankers bonuses, very few pension funds benefited. Then when it looked as if the "ponzi" scheme would crumble with the Dot.Com market crash, Gordon and Alan Greenspan colluded to keep bank rates low encouraging a public spending spree as opposed to the recesssion that should have happened. Now that was interfering in the free market in all the wrong ways.
It was at this point that Gordon abandoned the Conservative spending plans he had inherited and stuck to up until this market crisis. His answer was Kenysian; spend, spend ,spend, the floodgates were opened on Public Sector spending and to this day they have never been closed.

So contrary to what Gordon says the problem did not start in America, it started in his head even as he was planning to get into Government. I do not know if the Conservatives have the answers to get us out of our current dire straits but, I do know beyond any reasonable doubt Gordon and Labour in general do not.
A bad day for small Europeans 8:52pm on 28 Sep 2009 Gordon has a cunning plan.....Baldrick must be quaking in his shoes.

G8 becomes G20, conclusion the fudge becomes bigger and lasts longer.

The banks need to be seperated back into low risk and high risk modules, a re-invention of the wheel is once more called for, I give you Glass-Steagall.

The G20 give you fudge on bankers bonuses, the deliberations of committees are ever thus; Why deal with the cause when you can forever debate the effect.
Brown and bonuses 6:28pm on 27 Sep 2009 If you own banks outright and are majority shareholders in most others, why do you have to legislate to stop them paying bonuses?????

Bank bonuses are an effect, the way to stop them is to deal with the cause. The cause was Bankers getting their hands on other peoples' monies and using it in a risky manner that the rightful owners were dead set against.
This was the monies that the risk averse saver had deposited in High St and Main St savings accounts, they were content to receive a modest interest return knowing full well the banks in turn performed a social function by loaning their monies onto businsses boosting the businesses and giving the banks in turn a modest but, save profit on the deals.

This sensible and safe practice endured the test of time from 1933 through to 1999, then the act that offered protection to this sane and sensible arm of banking was removed. The repeal of the Glass-Steagall act led to bankers accessing these monies, not for any social benefit but, purely to allow them to play casino with it. They invested these monies in the riskiest of products ones that Warren Buffet would not touch with a barge pole refering to them as " financial products of mass destruction".

Was he ever right. It took time for the worthlessness of these products to unravel, long enough for the bankers to trouser their bonuses and Governments to spend their increased tax revenues. All on an illusion of profit that emptied every High St and Main St account in the Country.

The potential for this to happen all over again still remains, in fact it has already re-started but, never mind sometime, maybe, never, Gordon is going to legislate on banker's bonuses.
G20: History and fudge 06:37am on 26 Sep 2009 The only action that would have prevented another meltdown at the banks was the re-introduction of the Glass-Steagall act. This was not done because America and Britain are so reliant on taxes from their financial sectors that they want the madness to re-start as quickly as possible, for Gordon Brown and his re-election chances quick isn't quick enough.

The repeal of this act allowed bankers to access the monies of the risk averse saver deposited in every High St and Main St account, these people chose to avoid risk and settle for a modest but steady interest return on their savings, knowing full well that the banks used this money for the social activity of lending it on at a slightly higher rate to local businesses guaranteeing their continued success and a modest return to the banks profits.

Once Glass-Steagall was gone so was the protection, the banks then pillaged each and every one of these accounts against the express desire of the rightful owners of the monies and used it in casino activities buying up products that Warren Buffet had described as "weapons of financial destruction". This frenzy produced no social benefit, just bonuses for the bankers and increased taxes to Governments.

This is the madness which is soon to return, might take a few years before the bubble bursts again but, the inaction at this weeks G20 has assured the bubble is already being inflated.
Is Bercow being nosed out in race for Speaker? 7:07pm on 20 Jun 2009 If you can match any of the candidates for Speaker to the following profile: I stand for things in this place staying exactly as they always have been and will not tolerate change..You have the ideal candidate in perfect harmony with the will of the House.
Not so stressed 10:20pm on 07 May 2009 If it is so important and I do not doubt that it is, that Banks hold large enough cash reserves, how pray is this necessity going to be achieved in the UK. Who has the confidence to buy up shares in the mega basket case of British banking now calling itself the Lloyds Banking Group and after they post their latest losses who in their right mind would want to participate in a new shares issue by it.
The writing is already on the wall for this monstrosity to be broken down at some time in the future. If HBoS and RBS were too big to let fail who wants this "achiles heel" to survive any longer that it is safe to do so. Against these known facts there won't be many speculators risking their money on Lloyds and savers will be giving it a wide berth for as long as interest rates stay at a derisory 0.5%.
Maybe the early release of another £50 billion of Quantitative Easing has a two-fold objective; increase the money supply only for it to be stashed away in the Banks' reserves and also to hold down the value of Sterling. Of course none of this will have an impact on lending to small businesses to get the economy on the move but, we can't have everything.
Sometime, anytime soon, bank staff will be getting paid bonuses for; achieving their cash reserve targets.
A QE surprise 7:30pm on 07 May 2009 "If you think you are going to do something in the near future, might as well go ahead and do it now". What kind of rational is that for trying to get the economy back on its feet, it this sort of feverish Government (Gordon Brown)inspired, we must be doing something, that is making the future so uncertain.
We are commiting the same errors with Quantative Easing as were made on interest rate cuts. Interest rates were cut month on month, no pause to take a breath and check if they were working, now we have them at an historic low and can anyone hand on heart say they have made a blind bit of difference in getting the economy on the rise. Ask any of the finance experts and your answer will invariably be its too early to tell.
Now the "panic" to do something rather then hold one's nerve is driving another £50 billion into the economy when the same experts will tell they do not yet know if the first £50 billion has done the trick.
The Government still deludes it can turn the clock back and rekindle the fire under rising house prices, they actually believe the way out of the financial meltdown we are in is to repeat the mistakes of spend by taking on credit at Government and personal level. They want a repetition of the recklessness started in 2001 that led to the derailment of 2008.
At times like this the "do nothing Conservatives" seem a much safer bet for this Country's future than the Corporal Jones antics of this Government.
Cleaning up bankers' mess 06:30am on 02 May 2009 On the takeover of HBoS by Lloyds I would have thought there was and is a bigger "hello" than lack of competition needed for Government Ministers and Gordon Brown in particular. If you start from a position of this bank or that bank is too BIG to allow it to fail, then why on earth did it make any sort of sense to promote this takeover, thus creating a MEGA bank.
Busted 8:43pm on 01 May 2009 I would harbour a guess that Graph No.1 is the product of the fevered minds of the Politicians at the treasury and Graph No.2 would be the efforts of the impartial Civil Servants at the Treasury.

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